Dish DBS Corp. has priced a dual-tranche offering of secured bullet notes, placing $2.75 billion of 5.25% five-year bonds and $2.5 billion of 5.75% seven-year bonds. The deal finalized at the midpoint of price guidance. Joint bookrunners were Deutsche Bank, J.P. Morgan and Guggenheim. The transaction was initially pitched as $4 billion to be evenly split across both maturities, followed by a sizing revision to $5 billion, and then $5.25 billion. The shorter tenor was boosted by $250 million.
Proceeds will be used to make an intercompany loan to parent company Dish Network Corp. to finance the potential purchase of wireless spectrum licenses and/or for general corporate purposes, including the build-out of wireless infrastructure. The intercompany loan will be secured by the cash proceeds of the loan and interest in any wireless spectrum licenses acquired using such proceeds, according to a company statement.
Dish DBS, through its subsidiaries, provides pay-TV services under the Dish and Sling brands in the U.S.
Moody's on Nov. 8 downgraded the corporate and unsecured debt ratings for Dish Network to B2 from B1. Concurrently, the B2 corporate rating on Dish DBS was affirmed, while the subsidiary's unsecured debt grade was lowered to B3 from B2.
Moody's said the ratings actions on the parent company were prompted by expectations "that debt and leverage will increase at DISH (stand-alone) as a result of the transaction." The affirmation of the Dish DBS Corporate rating "is due to the neutralizing effect of the intercompany loan on the impact from the new debt issuance," while the lowered unsecured debt rating "is caused by the issuance of the new secured notes, which will result in contractual subordination of the unsecured notes and potential disproportionate loss absorption relative to the new secured notes if a bankruptcy were to occur."
Meanwhile, S&P Global Ratings the same day affirmed the B- issuer credit and unsecured debt ratings for Dish DBS.
Terms:
| Issuer |
Dish DBS Corp. |
| Ratings |
B+/Ba3 |
| Amount |
$2.75 billion |
| Issue |
Secured notes (144A/Reg S for life) |
| Coupon |
5.25% |
| Price |
100 |
| Yield |
5.25% |
| Spread |
T+407 |
| Maturity |
Dec. 1, 2026 |
| Call |
Non-call life (par call six months prior to maturity) |
| Price talk |
5.25% area |
| Notes |
Upsized from $2.5 billion; total deal upsized from $4 billion; up-to-35% equity claw at 105.25% prior to Dec. 1, 2024. |
| Issuer |
Dish DBS Corp. |
| Ratings |
B+/Ba3 |
| Amount |
$2.5 billion |
| Issue |
Senior secured notes (144A/Reg S for life) |
| Coupon |
5.75% |
| Price |
100 |
| Yield |
5.75% |
| Spread |
T+437 |
| Maturity |
Dec. 1, 2028 |
| Call |
Non-call life (par call 12 months prior to maturity) |
| Price talk |
5.75% area |
| Notes |
Total deal upsized from $4 billion; up-to-35% equity claw at 105.75% prior to Dec 1, 2024. |
| Bookrunners |
DB (Left Lead)/JPM/Guggenheim |
| Trade (date) |
Nov. 10, 2021 |
| Settle |
Nov. 26, 2021 (T+10) |
Article amended at 4:01 p.m. ET on Nov. 10, 2021 to include spread at issuance.
